Thank you for your continued patience. Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Please standby. Your meeting is about to begin. Ladies and gentlemen, thank you for standing by. Welcome to Axalta Coating Systems Ltd. Q4 and Full Year 2025 Earnings Call. All participants will be in a listen-only mode. A question and answer session will follow the presentation by management. Today's call is being recorded, and a replay will be available through February 17. Those listening after today's call should please note that the information provided in the recording will not be updated and therefore may no longer be current. I will now turn the call over to Colleen Lubic, Vice President of Investor Relations.

Good morning, everyone, and thank you for joining us to discuss Axalta Coating Systems Ltd.'s fourth quarter and full year 2025 financial results. I'm Colleen Lubic, Vice President of Investor Relations. With me today are Chrishan Anthon Villavarayan, our CEO and President, and Carl Anderson, our Chief Financial Officer. We posted our fourth quarter and full year 2025 financial results this morning. You can find today's presentation and supporting materials on the Investor Relations section of our website at axalta.com, which we will be referring to on this call. Our remarks today and the slide presentation may include forward-looking statements reflecting our current views of future events and their potential impact on Axalta Coating Systems Ltd.'s performance with respect to the proposed merger of equals between Axalta Coating Systems Ltd. and Axonobel. These statements involve risks and uncertainties, and actual results and outcomes may differ materially. We are under no obligation to update these statements. Our remarks in this slide presentation also contain various non-GAAP financial measures. We included reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. Refer to our filings with the SEC for more information. With that, I'll turn the call over to Chrishan Anthon Villavarayan.

Thank you, Colleen, and good morning, everyone. In the fourth quarter, Axalta Coating Systems Ltd. delivered another period of strong operational execution, solid margin performance, and record cash generation. We generated net sales of approximately $1.3 billion despite ongoing macro headwinds in North America, with year-over-year growth in three of our four regions. Adjusted EBITDA was $272 million, with a margin remaining strong at 21.5%, an improvement of 50 basis points versus last year. This marks our seventh consecutive quarter at or above our A Plan margin target of 21%, underscoring the strength of our commercial discipline, pricing actions, and cost management. Adjusted diluted EPS was $0.59, roughly flat year over year. In mobility coatings, we delivered a record fourth quarter performance in net sales and adjusted EBITDA, supported by new business wins and steady global production. Performance coating sales and mix fell short of our expectations in Q4. The fourth quarter marked a record for cash generation both in terms of operating and free cash flow. Overall, the quarter caps a year of significant progress at Axalta Coating Systems Ltd. Let's turn to slide four. Looking at 2025, we delivered record financial results this year, and I'm extremely proud of what the team accomplished. Adjusted EBITDA was $1.13 billion, representing a $317 million growth since 2022, with margins expanding over 500 basis points to 22%. Adjusted diluted EPS increased by approximately 55% over the same period, reaching another all-time high. Free cash flow came in at $466 million, an increase of over $300 million compared to 2022. These are exceptional results that highlight our strongest financial performance on record. The discipline, ownership, and drive that was to achieve these financial results speak to the strength of the Axalta Coating Systems Ltd. team, especially considering it was accomplished in a…

Thank you, Chrishan Anthon Villavarayan, and good morning, everyone. In the fourth quarter, net sales declined 4% year over year due to lower volumes in North America across all of our businesses. These headwinds more than offset favorable year-over-year foreign currency translation, primarily due to the stronger euro. Gross margins decreased 70 basis points compared to the previous year, primarily driven by unfavorable geographic mix tied to lower North America net sales compared to the prior year period. Net income was $60 million compared to $137 million in the prior year period, driven primarily by higher tax expense and $21 million in transaction costs primarily related to the announced merger with Axonobel. Income tax expense was $57 million higher in the fourth quarter of this year due to a one-time deferred tax benefit recognized in 2024 and an evaluation allowance accrued this quarter. These increased expenses were partially mitigated by excellent execution and costs. Interest expense declined 11%, SG&A expenses were down 8%, and other fixed operating costs were down 4% compared to a year ago. Adjusted EBITDA in the quarter was $272 million, down slightly from last year and lower than our guidance expectations as December volumes in both refinish and industrial came in lower than anticipated. Adjusted EBITDA margin expanded 50 basis points year over year, driven primarily by strong mobility results and lower costs. Adjusted diluted earnings per share was $0.59 in the quarter, roughly in line with a year ago, as fewer shares outstanding and lower interest expense helped to offset decreased income from operations. Fourth quarter cash from operations of $344 million and free cash flow of $290 million were both fourth quarter records. The year-over-year increase was driven primarily by improved working capital and lower interest payments. Performance Coatings fourth quarter net sales declined…

As you know, in November, we announced a merger of equals with Axonobel. This combination represents an extraordinary value creation opportunity, one that we believe neither company could realize alone. Together, we expect to create a global leader with phenomenal scale and end-market diversification, significant free cash flow generation, EBITDA margins approaching 20%, and an investment-grade credit rating and balance sheet flexibility. Additionally, we identified $600 million in synergy potential, and based on our joint track record, I'm confident we will deliver this. The combined company will be listed on the New York Stock Exchange and will be a global performance coatings leader. This merger is more than a strategic milestone; it is a catalyst for unlocking powerful new growth vectors fueled by the combined strength of our shared innovation engines and a commitment to delivering superior value creation. As we step into 2026, we do so with a strong balance sheet, an agile operating model, and a clear focus on our priorities. Our teams have consistently demonstrated the ability to navigate complexity and deliver exceptional performance. I am confident that we will create sustainable value as we look ahead to completing the merger with Axonobel. With that, I will now turn the call over to the operator to open the line for Q&A.

Thank you. Once again, that is star one to ask a question. Our first question is from Chris Parkinson with Wolfe Research. Please go ahead. Your line is open.

Just could you just give us the status of global Refinish markets? And I'd love to focus on, you know, three different facets. Number one, just where we stand with, you know, destocking trends. I don't want to name names, but it seems like things should arguably be coming to an end in terms of the large customers. Number two, just how you see claims data conversion with actual collision data as we progress through 2026, you know, just given some of the updates that we got towards the end of 2025. And then number three, just, you know, where we stand with, you know, share gain potential, iris launches, you know, penetration in Europe and the US versus expectations. We can just kind of hear your updates on how those presumptions are factoring in your 2026 guidance. It would be particularly helpful. Thank you.

Sure. Good morning, Chris. I'll take this one. So starting with destocking, I think, you know, this if I look at our Q4 performance and a little bit of Q1, it's a perfect representation of what happened prior associated with destocking. Three of our four end markets, so when we look at South America, Europe, and Asia, all three grew. So this was really a geographic mix issue, and this was just primarily related to destocking. And what I would say is destocking came in slightly worse than where we expected. And as you know, with the margin performance that we have, and how strong our North American business is, that's what kind of drove a little bit of the impact. Sales, I would say, for Q4, were primarily almost flat to slightly lower, I would say, line. It was just the pure of how strong North America and how destock obviously impacts us in this region. If I play that into Q1, we're essentially pulling that weakness through. And as I've always said, destocking started or this consolidation of our largest distributor acquiring FM started in Q2 of last year, and we expect that to end as with all our conversations and what we're tracking in Q2 of this year. So as you play that out, that's why we expect that to come back. And if you look at the expectations of performance, we just have to hit what we did last year in Q2. So from that perspective, that's what gives us confidence as we play this forward. In terms of claims, as you think about the slide that Carl went through on the guidance, I think there's a lot of green shoots that really build confidence into what we see in 2026. I would say, you know,…

Got it. And just as a quick follow-up, just shifting over, our attention to the deal. You know, obviously, there's been a lot of back and forth, and you've been communicating with, you know, both sides of the, you know, shareholder community over the last several months. What else do you believe that you and Carl can do in particular to further underscore or gain, rather, the conviction of the biocide communities, you know, conviction in terms of hitting the $600 million in synergies? Is it because of, you know, regional differences? Is it because of procurement aspects? Just anything you could add in terms of what your team can do to lead the biotech community to further embrace that number would be particularly helpful. Thank you.

Sure, Chris. I'll start off with a little bit of perspective on the investor sentiment, and then I'm going to turn it over to Carl. On the investor sentiment, it's been, I would say, it continues to improve, and it's been largely positive. We've been talking to all our large investors on both sides. Greg, Rakesh, myself, Carl, we've spent a lot of time working with our investors, our long-onlys. And we've also seen new folks come into the story. So overall, the sentiment is moving. We still have obviously a lot of work to go do as we head into the vote. But at this point, you know, our conversations are trending the right way, and I would say I'm very pleased with where we're going.

Yes, Chris, just to add to that. I think as we have talked to the investor community, a couple of points that are really beginning to resonate. If you think about the overall merger. One, we are creating the largest global performance coatings company. We're creating the second-largest paints and coating company. We are going to have three times the revenue, three times the EBITDA, and greater than three times the free cash flow on a combined enterprise. So we are very excited about what this does, not only for the financial aspect but also as we think about our customers. You know, we're gonna be operating in seven different end markets from refinish to marine to industrial to aerospace. And we have leading positions in our products and all the customers we serve. So I think that it will be the message. I think the synergies as articulated, we feel very, very strong and very comfortable with. We also believe there's upside as we think about the revenue synergies that this deal provides.

Thank you.

You're welcome, Chris.

Thank you. We'll move on now to Ghansham Panjabi of Baird. Your line is open.

Everyone. Good morning, John.

Oh, oh. Hey, Chris. Sorry. This is actually Joshua Vasily sitting in for Ghansham. Hope you guys are well. You know, maybe if I could just start off on the performance coatings side of things. You know, just you, Chris, you mentioned that it came in a little bit below your expectations. It sounds like a lot of that was, you know, focused on refinish, but maybe if we could just focus on the side of the aisle and just how that performed relative to your expectations. And then just your current thoughts on that business and just trends on a regional basis, that'd be great. Thank you.

Sure. Sure. Absolutely. So I would say all from a performance coatings perspective, sales came in lower. Industrial sales were also lower, primarily all of them as we look at Q4 driven by the market. But as I look into, let's call it, 2026, again, we're starting to see some green shoots as Carl has on his guidance slide. Obviously, what's happening with PMI and our expectations from a policy perspective with insurance, sorry, with interest rates as well as anything that's done to spur construction. Residential, or commercial, I believe, will be a positive trend, which is why we expect the back half of the year to pick up here. So industrial is probably one of the few businesses that we're counting on a bit of market, specifically in North America. But in terms of green shoots in this business, as I said in my prepared remarks, Asia for us has been very, very good. We've grown 5% in that space even as we look in Q4. And this is really driven around what we do in that business. We have a lot that we do specific to EV and what we do for battery case coatings as well as impregnating resins for motors. So we see those businesses really driving growth. And we certainly see that also being a positive trend. So Asia is working out well. I would say North America and Europe seem sluggish. But our expectation is a lot of the policy actions would drive some improvement into the back half of the year. But setting all that aside, the one thing that I'm absolutely proud of that team is what they've done in with this, which is an amazing job of driving the margin. If you look at the margin performance, even if we look at Q4, we talked about, you know, sales being away from our expectations, but overall company margins being up 50 basis points. In the industrial business, we had a target of 400 basis points of margin. Those guys are about 200 basis points above that target. They are just kicking butt on that front. So, you know, that team has done a great job of really driving, let's call it, cost performance, operational excellence, and really growing where they can get accretive margin.

Great. Thank you very much.

You're welcome.

Thank you. We'll now move on to Laurent Favre of BNP. Your line is now open.

Yes. Good morning, all. I guess I've got a question around margin assumptions for the year. So you're guiding your sales up low single digits, EBITDA up low single digits. I'm a bit surprised, I guess, by the comments around productivity and also pricing. So I'm just wondering, what are you baking in in terms of margin of safety around margin? Is it around raw materials? Is it around pricing? Thank you.

Yes. Good morning, Laurent. So yes, I think as we look at maybe I'll start with revenue and then how that will kind of step down into EBITDA and our assumptions. So I think from a price mix perspective, we do see that up for the full year about low single digits. That will be kind of coming through. Volumes, kind of planning for a flattish in volume environment. There is a difference between the first half being down and that begins to increase in the second half. And then I think FX most likely, at least on the revenue side, should be probably a very low single low single digit tailwind as well. And if you think about what that then means for overall EBITDA and the margin kind of guide that we said is last year, we did about 22 per we did 22% EBITDA margin. I think next year, we're planning to be above 22%. And I think that does break down. There should be we will convert on the incremental revenue that does come through. In addition, we also have, you know, cost actions that will that will benefit in 2026 as well. So there is some carryover cost actions that we have from some of the previously announced execution items that we've done, so call that about $30 million to $40 million dollars of improved benefit from that. And then we also will continue to drive a little bit more on productivity, not only in the plants, but also with our purchasing team.

Thank you. And then just on follow-up on the refinish side. Can you talk about regionally, what you're seeing? Clearly, you were disappointed in The US on sensing. I'm just wondering whether, for instance, in Europe, you are also seeing a deterioration of your top line. And is that something that you're also carrying into the guidance for '26?

Sure. So as we look at it, from a regional basis, I would say looking at Q4, South America, Europe, and Asia grew. So I think, you know, from our perspective, those came in just as we planned, and it's expected. We actually had a great story even in Europe with, you know, the weakness. And as we play out into next year, into 2026 and how we have set up the guide, we obviously show Q1 volumes being down because of the pressures associated with destocking. And a little bit of volume weakness very little in North America. But with the exception of that, which showing Q2, Q3, and Q4. Q3 sorry, Q2 volumes being flat in Q3 and Q3 Q4 volumes coming up slightly. So net net, if I look at the whole year, Laurent, for refinish volumes, we expect it to be flat to slightly up.

Okay. Thank you.

You're welcome.

Thank you. We'll now move on to Kevin McCarthy with Vertical Research Partners. Your line is open.

Yes. Good morning. Thank you. Chris, can you discuss how your Refinish strategy may evolve through the MOE? I've thought about at Axalta Coating Systems Ltd. being focused on penetration of the economy segment, moving into adjacencies, evaluating distributor acquisitions in selected markets. Which of those elements will remain the same, and what do you think will change as you look to stabilize and hopefully grow this business in the combined company?

That's a great question, Kevin. Good morning. And as I think through this, that is one of the great stories of the combinations of the companies. Obviously, if you think about the merger of both companies, and this has obviously been looked at before, the greatest aspect of these two companies coming together is the complementary nature of it. And if you really look at the perspective whether it's in refinish or in mobility or a little bit in industrial, we're absolutely complementary and it's just a great story. So and I'm gonna pick the one that you hit on, which is Refinish. You know, in Refinish, we're stronger in premium. Stronger in economy. And so I think at a very, very high level, you know, the technology that we can provide and enable them to grow their capabilities in distribution as I think about, you know, The Middle East and especially, you know, more that we can do with them in Africa and Asia and then what we can do with bringing our capabilities, and then across the board with our joint distribution with, let's call it, the adjacencies products with putty, fillers, that's the opportunity to the point that Carl made about 1% to 2% revenue opportunities, what we can provide our customers, you know, the ability to have, you know, one point of sale to bring together the products that they're getting from two different folks at this point is just a great story. And so that, I think, you know, especially regionally, there is so much opportunity whether you think about The Middle East and Africa or whether you think about Latin America. And then when you come into the two strong geographies, of Europe and North America, we have complementary products that I think really enables us to grow. So that's refinish as one data point. On the mobility side, they're more into, let's call it, interior plastics. Or APC. We're more on the exterior. Again, the combination gives us the ability to really drive product, let's call it, enhanced value to our customers. So again, we're extremely complementary, which is a great story when you put these two companies together. For not only our customers, but also our employees. It creates the least amount of disruption. And I think this is why, as Greg and I looked at this, obviously, many options that both companies had. This is a great story of why these two things belong to or do these two companies belong together.

Thank you for that. And then secondly, with the turn of the calendar page into January, we've seen some of the commodity chemicals that we track start to percolate higher. Can you discuss what you're baking into your guide for the raw material basket in the first quarter and for the year, please?

Yes. Thanks, Kevin. Yes. For raws, we are assuming overall that it's going to be flat on a year-over-year basis at this point. I think the second half, you may see that tick up a little bit, but that'll be offset by maybe some what we're seeing kind of real-time in the first half. So overall, what's embedded in our guide is a little bit of a flat environment for raws. I think as I look at the team and what we're being able to look to drive, you know, we will have additional productivity above and beyond that. So on a net basis, we still expect to outperform on a year-over-year basis. In total for our raw materials.

Thanks very much.

Thank you. We'll now move on to Matthew DeYoe of Bank of America. Your line is now open.

Good morning. Hakim on for Matthew DeYoe. In terms of your 100 to 200 points of revenue synergies, where do you expect to achieve them, and what is the margin assumption on that? Thank you.

Yeah. I think, you know, I think about the revenue synergies opportunities, we'll be providing probably much more detail as we get closer and closer in this process. So I don't want to lean out too far as it relates to the implication on that. I would just say on a combined basis, if you look at the companies, you know, kind of coming together, we do expect overall margins to be in that 19% to 20% type of range. Again, just enormous opportunities that we think we'll be able to accomplish on synergies. We have very detailed plans across all of the different cost areas, whether it's on SG&A, whether that's on our plants from an operation perspective, whether it's on purchasing. So we feel very, very confident in our ability to deliver that, which will affect and drive and be one of the best performing margin companies on a combined basis. So more details to come as we progress.

Thank you. And as a quick follow-up, there have been discussions on keeping the dual listing for a period of time. But I see your slides are saying York Stock Exchange only listing. Is that, like, the certain path going forward and can we get more color on that decision? Thank you.

Yeah. I think the intent of the slide was the New York Stock Exchange will be the primary listing. There probably will be at least maybe twelve months where there'll be dual listing. But eventually, the combined company will be just listed on the New York Stock Exchange.

Thank you. We'll now move on to Joshua Spector with UBS. Your line is open.

Good morning. This is Lucas on for Joshua Spector. So just wanted to go back to the first quarter outlook, if we could. I mean, seems to imply that the organic expectations are probably down mid to high single digits. Depending on what you're sort of assuming on effects there. I mean, backing out the current rates, it looks like it'd be more in the kind of high single-digit decline range. So I guess just what's underlying that for each of the businesses? Is it similar to what happened in the fourth quarter with Refinish down double digits? Industrial down high single and mobility down low single? Or what are you assuming there? Thanks.

Yes. Thanks. As we think about the quarter and then maybe for the full year as it relates to kind of that question, I think as we look at Refinish, it does all in will be very similar to what we saw in the fourth quarter as far as on at least on a year-on-year comparison as it relates to overall volumes at this point. I think our industrial business also, as we think on a year-over-year basis, will also be down probably in that mid to high single-digit percentage as well. And again, mobility would be probably roughly flat as we think about on a year-over-year basis, specifically for the first quarter. And then we start seeing inflection as we get a little bit in the second quarter, but as we said in our prepared remarks, you really start seeing that come through in Q3 and Q4. Really across most of our businesses. And that's how we put together the overall guide for the year.

Right. Thanks. And then you said that you highlighted, I guess, where you thought the EBITDA could have been for the year in the steady state if the macro was better in the $1.3 billion range, you know, to get $150 million higher than where you've done a pointing to for the guide. So I was wondering if you can kind of just talk us through where do you sort of see that earnings gap amongst the businesses, you know? I would assume Refinish is probably a large chunk of that. Being kind of mid-single digits below trend. But also, I mean, industrial as an example, volumes there have been down four years in a row and are down roughly 25% cumulatively. Maybe if you could kind of frame that for us where you think the different parts are and how we can see that come back in a recovery story?

Sure, Lucas. I think that you hit two of them. Just one missing, which is the commercial vehicle, but just let me go through it. I think Refinish, for example, mid to if we look back over the last two years, I would call it, you know, down mid-single digits as an average. If you look year on year 2024-2025. So that's certainly one. But then beyond that, as I look at the next one, it's really commercial vehicle. Commercial vehicle's down about 30%. If you're 25% to 30% from where we predicted, and even if you play it out, it's an incredibly cyclical business. '26 was supposed to be a historic high because we were going to have the fee buy driven by the emissions change. So we were supposed to be, let's call it, on that 350 to 360 range. And replacement is actually 275. And we're, let's call it, around that 240 to 250 range. So we're significantly below even replacement. We do see that track ticking back up. So to answer your question of where do I see recovery, for me, where do I see recovery is certainly in CV. I think, you know, based on just the cyclicality of that business and watching it for over twenty years. From my past, I expect that to return to at least replacement levels in 2027. So that's one. The other element of this is, obviously, as you think about, refinish. We have a specific issue with destocking. And I've always said this is not a V-shaped recovery. This is gonna be something that's U-shaped, and we expect this to recover into Q2. And even if we get back to the numbers that we had when we had destocking in 2024 Q2, that's essentially what our guide is in pretty much in simplistic work. Way of perspective as I look at '26. So I think that coming back will certainly be helpful. So those are the two. And then finally, in industrial, counting on a little bit of, let's call it, just a return through some of the interest rate reductions and a little bit of maybe, policy changes that would drive in the back end. Again, we're not counting on much. This is really 2% to 3%. It's nothing significant. And all that said, you know, as you can think about the cost actions we're driving, we obviously have plans to mitigate some of this if everything doesn't come back up.

Yeah. Lucas, just one other point on that. I think the very simple way to think about it on every incremental dollar of revenue, we think we're gonna contribute close to 40% to EBITDA as we move forward based off all the actions that we've actually over the last several years.

Right. Thank you.

Thank you. We'll now move on to Aleksey Yefremov of KeyBanc Capital Markets. Your line is open.

Thanks. Good morning, guys. You got Ryan on for Aleksey Yefremov. Just wanted to kind of level set maybe a bridge from 1Q kind of through the balance of the year? I think looking at it, it's about maybe down high single digits kind of in with what you guys are kind of pointing to. And then is the right way to think about it on an EBITDA basis maybe flat kind of in 2Q and in the high single-digit growth in the back half kind of as Refinish and Industrial normalize a little bit? Or just kind of any thoughts there would be helpful.

Yeah. Hey, Ryan. Yeah. I think that's a good way to think about it. If you think about where we start in the year for Q1, you can kind of see what we did last year in Q2 being in that low to 90s. And then we kind of ramp as we get a little bit further in the second half. So that is the right way to think about it from a forecast and a model perspective.

Okay. Great. Thank you. And then just I actually wanted to ask a little bit more about kind of CV. I think the last couple of months' worth of class eight orders in North America have actually shown, like, fairly positive growth. So there may be some, like, inventory that kind of needs to be worked through the chain before we kind of get back to a better build rate in the back half? We're just trying to understand some of the dynamics. Thank you.

No. I wouldn't say that. I think if I look at and I'd it's a fair assessment. You know, one of our large customers just announced recently, and you can see the positive trends as they look at twenty-six. On top of that, ACT, to your point, just Ryan, just released and took it up to 270. But, you know, we obviously haven't seen that, you know, that reflect in FTR. We're just being a little bit cautious here. Wanna jump ahead of the gun, but I that's a fair assessment. I would say, you know, there is probably more positive momentum in CV, which is a great story for us just, you know, as you think about it, that it comes in at a higher margin almost performance coatings margin in our mobility business. So, you know, there's probably some upside there, but again, we're going in with a realistic guide and wanna make sure that we first see that improvement come through. But in terms of inventory level, I would say, inventory levels are probably at, you know, standard levels at this point. There's nothing that's driving, let's call it, excess inventory sitting at OE retail footprint at this point.

Thank you.

We'll now move on to David Begleiter of Deutsche Bank. Line is open.

Thank you. Good morning. Chris, on Refinish, can you discuss just on pricing alone, what you got in '25? What you expect to get in '26? Just pricing, no mix.

Yeah. No change in the strategy, David, but we got 2% in 2025, and the target for 2026 is to stay consistent with what we have done historically. So it's just 2% net is what we work towards, and that's essentially what we're doing. Last year, we went out with we priced twice to hit the same target. This year, we're just gonna do our standard one. Pricing.

Very good. And on the combination, Chris, when you look at deco, any updated thoughts on your on the role of Deco in the combined portfolio? And could we see some Deco divestitures down the road? Thank you.

Well, I think really that's a call for Greg and the Axo team to make obviously, we're that's not a let's call it an end market that we're in. You know, again, as I look at it, and I think Carl hit on it, you know, the best part of this combination is really the three elements that Carl talked about which is scale, innovation, and synergies. And I look at it as, you know, it's not when you think about the scale, it's not the $17 billion of complete revenue. It's the fact that we approach seven different end markets and the complementary nature of where we do have, let's call it, an ability to service our customers better. I think that's just incredible. But underneath that, the scale is really around the financial strength that the combined company provides. You know, the joint free cash flow is just great, and the leverage ratio is at a great spot, spot that you know, the leadership has the ability to then invest in certainly in parts that they define as growth vectors. And it could be deco. It could be refinish. It could be any of the seven end markets that, you know, strategically makes the most sense. And then beyond that, I look at the innovation capability. A joint company that has over 3,500 patents with almost 3,000 engineers, just the scale and, you know, what this organization can do in the future to create the best-in-class coatings for not only our customers but for just changing the world forward. It's just for me, it's just the joint strength of the combined company and, obviously, the last one being synergies is the just the incremental value that automatically provides for our shareholders is and I think it's great. And I mean, Carl, anything to add?

Yeah. And, David, just as you saw from ExxonMobil, they had a really, really phenomenal transaction when they sold their India deco business. If you look at the multiple they received on that, I think it mid-twenties. So I do know there's some opportunities that the team is continuing to evaluate in Southeast Asia as well, Endecco. But, I think that's something that is kind of part of their strategy as this thing goes forward.

Thank you.

You're welcome.

Thank you. We'll move on now to John Roberts with Mizuho. Your line is now open.

Thank you. This is Edwin Rodriguez for John. Chris, quick one for me on Refinish. Do you have a good sense of when claim activity should start in to improve? And most importantly, what will be the key drivers of that improvement? Is it the consumer doing better? Like, is it something else? Like, yeah, what's gonna be the catalyst for that change in there?

Yeah. I think this is the big question from our perspective. To me, I think it's pretty straightforward. It is a lot to do with the consumer associated with really, you know, what happens with insurance claims and or insurance rates and just getting, you know, the entire inflationary impact that they have faced, I think that abating over time. And this is two elements to this. Obviously, just purely what's happening with insurance costs, which, again, the green shoot is it's coming down to where we're not seeing increases as significant as what we saw in 'twenty three and 'twenty four. But that doesn't take away from to drive this. We should expect this to continue to go down, not just be flat. So that's one. The second element of this is obviously repair cost. Repair cost is also an important aspect. And the cost of repairs have gone up, and that's cost a constraint. Again, there's green shoots here. Repair costs have also meant body shops don't have as much work, and I can start seeing that I think folks are starting to essentially look at appropriately pricing to make sure that the body shops get work back in. So I do think that this trend is trending the right way. But in terms of when this returns, I think that's the million-dollar question.

Okay. Perfect. Thank you.

You're welcome.

Thank you. We'll move on now to Mike Harrison with Seaport Research Partners. Your line is open.

Hi. Good morning. Thanks for taking my question. Just in terms of the mix that you're seeing in Refinish, I'm curious if you can comment on the speed at which you're seeing growth in mainstreaming economy versus premium and if you expect that to continue to be a headwind to mix in 2026? And can you also comment on whether the combination with Axo maybe enhances your refinish opportunities in that mainstream and economy segment of the market?

Sure. That's a great question, Mike. So you're right. I, you know, with the acquisition of CoverFlex, we certainly, you know, last year was a record number of body shop wins. In the economy space. So that certainly did help us. And so you can see a little bit of, let's call it, impact from us winning more. So from a Performance Coatings margin perspective, it's positive. Obviously, from a refinish margin perspective because, you know, we have more in premium. It does have a bit of an impact for the overall, but overall, Axalta Coating Systems Ltd., overall performance coatings we bought this was part of the strategy. This is why we wanted to grow the economy. Because we only had, you know, about 9% market share here. We're now around that 11% market share. So it was certainly, certainly a driver, and it was something that we wanted. And so I would say, in that sense, the strategy is working. And, you know, we certainly are seeing growth here. And nothing's changed in that perspective. And we're gonna continue to drive hard, even as I look at '26 to make sure that we continue to grow in the economy. Now in terms of the overall merger, the one thing that I can say is it's complementary. So I think, you know, as we look at their capabilities versus our capabilities, it's pretty complementary. And I think this is, again, why this partnership makes so much sense.

Alright. And then apologies if I missed this. Earlier, but I'm curious. In light vehicle, can you just talk a little bit about new business wins? And I guess if you're expecting to grow faster than underlying markets in 2026, is that a result of business that you won last year, and it's just flowing through this year? Or, have you seen some recent new business wins that should be contributing in '26? Thank you.

Yeah. Thanks, Mike. I think if you look at the new business wins in mobility and especially specifically in light vehicle, a lot of that is coming from Brazil. So that is, so we announced that about a year ago with up to over $70 million in new business wins. You will see about $30 million of that will carry over for this year. So that will be in the results in 2026. But the team continues to do a really great job of executing and winning in Asia, in China, as well as in North America as well. So those trend lines are very, very stable, and, actually, we're seeing continued growth in we're really excited about within that business is just the overall margin performance and the consistency of that that we have as within mobility.

Thank you. At this time, we've reached our allotted time for questions. I'll now turn the call back over to Chrishan Anthon Villavarayan.

Well, thank you. Before we close the call, I really want to thank all of you and just say how I'm truly proud of the Axalta Coating Systems Ltd. team for the performance in 2025. Especially executing under such challenging circumstances. We have an incredibly exciting year ahead of us as we closed the last year of the A Plan. And we all look forward to our journey with Axonobel. With that, have a great day, and look forward to talking to you all soon. Thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.